Treasure Funds

By Iain Manley

Occasionally, the trappings of wealth like fast cars, fine wines and important works of art are also among the best investments. Examples abound: take singer and songwriter Chris de Burgh, who sold his most precious wines last year including a case of Château Lafite Rothschild 1945 for US $552,000,

or almost double the collection guide price; Baron Guy Ullenscollection of contemporary Chinese art was proved cannier still just months later, after a part of it fetched US$ 55 million at auction in Hong Kong.

In the late 1980s, Ullens bought a painting a day for roughly UD$ 5,000 per artwork and assembled a collection of a breadth and depth so significant that it defined the era.

Pink Floyd drummer Nick Mason prefers cars, and has a collection of 40 classic models that he regularly races at the 24 Hours of Le Mans, for instance. His 1962 Ferrari 250 GTO has entered into competitions every year since it was built, but is still among the most valuable cars in the world. An almost identical model was sold privately for US$ 35 million in June, realising a tenfold profit: in 1996, it was sold for just $3,5 million.

While it clear that collections of rare or otherwise precious goods can pay healthy dividends, they can just as easily prove wasteful: wine can spoil, art is extremely unpredictable and decades can pass before a verdict is reached on even the most expensive cars, defining them as classics. The trick is to know what to buy, and to have some influence within the market, which is why collectible or treasure funds make sense for all but the most enthusiastic, knowledgeable or wealthy investors. One such fund is the Xiling Group, which invests in Chinese artworks and antiques. It has raised a total of US$ 42 million with two funds, guided by a set of objectives that help to make sense of how collectibles can earn healthy returns.